Gov’t Memo Targets Airbnb

Blacklock's Reporter

The Department of Finance in an Access To Information memo estimates Airbnb accounts for 10 percent of hotel room sales in two Canadian cities. Hoteliers have appealed for tax audits on condominium and apartment dwellers with Airbnb listings.

“Over half of revenues were generated by hosts who operated more than one Airbnb listing,” staff wrote in an April 17 memo to Finance Minister Bill Morneau. Airbnb listings in Toronto and Vancouver “more than doubled” since 2015, said the memo The Impact Of Airbnb In Toronto And Vancouver.

The finance department counted 3,598 annual Airbnb listings in Toronto with 44,000 hotel rooms, and 1,826 rentals in Vancouver with 24,000 hotel rooms. “The large majority of these, 70 to 80 percent, are multi-units, i.e. condominiums and apartments,” wrote staff; “In terms of total accommodation demand in 2017, Airbnb represented 10 percent in both cities.”

Airbnb revenues were estimated at US$100 million in Vancouver and US$150 million in Toronto with rentals in select downtown neighbourhoods accounting for most listings. “These results were not surprising,” said the memo. Popular Airbnb listings were King West, Church & Yonge and waterfront condos in Toronto, and Kitsilano, the West End and downtown listings in Vancouver.

“There is a strong financial incentive for property owners to utilize short-term rentals over long-term rentals,” said Impact. Department staff estimated condo owners can earn a premium of as much as 51 to 77 percent by listing property through Airbnb compared to long-term tenants.

“Those in favour of regulating short-term rentals argue that such arrangements have lowered vacancy rates of long-term rentals in desirable neighbourhoods, kept rents elevated, and exacerbated affordable housing issues,” wrote staff. “In contrast, supporters of short-term rentals argue the additional income helps residents pay their mortgage or rent, especially in cities where housing has become less affordable.”

The memo did not detail any federal action. Portions of the document were redacted.

The Hotel Association of Canada on August 16 proposed the Canada Revenue Agency audit Airbnb vendors. “We’re not against competition,” said Alana Baker, director of government relations for Association. “Competition in fact is a good thing. What we’re looking for here is fairness and a level playing field.”

“We’re not talking about someone who is renting out a room in their home,” said Baker. “We’re not talking about the sharing economy anymore; what we’re seeing is the emergence of commercial operators, hosts who are renting out multiple units – entire homes.”

“They’re operating a business, like a hotel business, but they are not subject to the same rules and regulations,” Baker told reporters. “These are two different things. So, home-sharing is one thing; it’s the commercial operations we’re looking at.”